Union machinists at Boeing Co. in Seattle swallowed hard last week and narrowly approved an eight-year contract that will replace their pensions with 401(k) plans, and provide pay increases of 1 percent every other year of the deal.

Boeing said this was its last, best offer (workers voted down an even tougher proposal in November), and rejection of the deal would mean the loss of thousands of jobs to other states. After Boeing made the threat, 22 states offered 54 sites to the company in hopes of winning high-value jobs building Boeing’s new version of the 777.

The company used those offers to extract $8.7 billion in tax incentives from the state of Washington, a 16-year extension of sweeteners passed in 2003 to keep Dreamliner production in the state.

“It’ll be a wonderful day when all of the states can agree they won’t have to compete with one another in any incentive program,” said Gov. Jay Inslee, “but that’s not the real work right now.”

Alan May, Boeing vice president of human resources, told workers the concessions were necessary because, “The airplanes we are selling today are at significant relative price discounts compared to those in the past.”

While all of this was going on, Boeing’s board of directors doubled the dividend and set aside $10 billion to buy back stock. The Wall Street Journal reported the actions were taken to placate stockholders who thought the company wasn’t returning enough of its record profits to investors.